Comments

David Thompson Posted:
So very, very true. It beggars belief that we consider ourselves to be a developed nation when so much of our economy is based on selling milk powder or logs. BTW, I own a Plinius amplifier (my second) that drives a set of Theophany speakers.
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David Thompson Posted:
A robust but sobering report. It concerns me that confidence is rising, yet sales and exports are down and "manufacturers and exporters are still lagging behind other sectors". Surely we should wait until we're earning more money before we start spending more?
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siemens Posted:
Yes true! The only thing that will never die in this world is the nature and its science behind it. Great post.
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Kieran Ormandy Posted:
Thanks for the question Steven, Germany has seen increases in manufacturing employment since 2009, and Switzerland has had stable manufacturing employment between 2006 – 2011, even in the face of ongoing Euro-zone issues. Korea has seen increases in manufacturing employment since 2008 and Israel experienced large increases since 1998, while being stable over the last 4 years. Singapore has had increases in manufacturing employment over the last two years. These countries all value their manufacturing sectors and work to protect them, this is reflected in the above numbers and their performance through the GFC. Note data around the above examples was sourced from OECD labour market stats.
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John Walley Posted:
Point one: you should have no doubt what our Association says publically represent the views of our members. Point two: we don’t knee jerk responses, if you trace back our comments around NZPower you will see them link all the way back to our research in 2004 and 2005. All that material is fully linked from our comments above. Point three: you will note our comments on major users, sadly the same advantage does not accrue to smaller industrial users. The perverse incentives of the LRMC approach in all this are well known. Point four: the NZMEA is not like any other Association in New Zealand we admit only manufacturers and exporters into membership, and our public expressions are the views of that restricted membership.
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3/8/12

Quarterly Survey: Export sales rebound


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The latest New Zealand Manufacturers and Exporters Association (NZMEA) Survey of Business Conditions completed during July 2012, shows total sales in June 2012 increased 13.1% (export sales increased by 14% with domestic sales increasing 12.5%) on June 2011.

The NZMEA survey sample this month covered NZ$652m in annualised sales, with an export content of 41%.

Net confidence dropped slightly to 17, down from 18 last month.

The current performance index (a combination of profitability and cash flow) is at 103, up from 102.5 in May, the change index (capacity utilisation, staff levels, orders and inventories) went up to 102 from 101 in the last survey, and the forecast index (investment, sales, profitability and staff) is at 104, up on May’s result of 103.5. Anything greater than 100 indicates an expansion.

Constraints reported were 75% markets, 17% production capacity and 8% skilled staff.

Staff numbers for June decreased year on year by 1.4%.

“Export sales have bounced back strongly after declining last month, causing a decent increase in sales overall,” says NZMEA Chief Executive John Walley. “Offsetting the expansion in sales was a reduction in staff numbers and a stagnant confidence rating; additionally there are some earthquake effects in 2011 not present this year.”

“We have been bouncing around the zero growth mark for the past three years now, so it is pleasing to see an upturn, but we are still waiting for a trend of increased sales to develop. Index numbers are up this month and manufacturers are also predicting that the percentage of capacity in use will rise over the next quarter, so that is a positive sign.”

“Manufacturers and exporters commented that sales were holding up but there was a reduction in forward orders suggesting that firms are nervous about future prospects. The most concerning factor from the comments on the survey was that demand from Australia is quickly drying up. The message there is that the effects of the mining industry on the wider Australian economy are crowding out some manufacturing activity.”

“The exchange rate remains a major problem with a number of firms reporting that the poor returns from Europe and increased competitiveness amongst local European suppliers able to undercut New Zealand on price. ‘Atrocious’ was the word used to describe margins on goods sold to Europe and the United States.”

“There remain difficulties with business interruption and material damage insurance claims in Christchurch. There have been cases reported where insurance companies have attempted to avoid business interruption claims where the 12 month period of cover is up despite the claims being lodged well within the indemnity period.”

“The exchange rate was once again mentioned as the biggest barrier for exporters and there is an expectation of some action from the Government on this. Some revisions to the Reserve Bank Act to accompany the new Governor would be a good place to start on this. Also we need to address our longer term fiscal situation - superannuation entitlements need to be addressed as the Herald’s Mood of the Boardroom survey suggested last week. If the goal is to grow our export economy we will have to deal with many sacred cows.”

 

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tags: survey, superannuation, insurance, margins, forward orders

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